Guyana’s demand for electricity has grown 18% in five years. That growth, plus the volatility of fossil fuel prices, highlights the country’s need for a renewable energy policy framework. At this time, its renewables policy is limited to tax incentives.
Guyana’s electricity market is controlled by the state-owned Guyana Power and Light (GPL), a vertically integrated company responsible for electricity distribution, transmission and part of generation. The country’s market also includes independent power producers (IPP), which must sell their electricity to GPL.
The Guyana Energy Agency (GEA), is responsible for developing a national energy policy and its implementation, as well as making recommendations to ministries concerning energy management and encouraging the development of renewable energy sources.
Guyana relies mostly on power generation from fossil fuels. In 2014, 83% of its total 177MW of installed capacity was fuel oil and diesel, which is imported and its price is volatile. Biomass accounted for the remaining 17% of the installed capacity. Average retail electricity rates in Guyana are among the highest in Latin America and the Caribbean.
The Government of Guyana is developing a strategy for the introduction of renewable energy technologies in the country as a plan to diversify Guyana’s electricity mix. A special focus will be on wind, solar and small hydro.
Guysuco operates a 30MW biomass plant using sugarcane bagasse, 10MW of which dispatches power to GPL’s grid. The Government has plans to enhance the power plant’s capacity and increase electricity generation. Guysuco also operates the country’s first ethanol plant, which was commissioned in August 2013, and uses sugarcane molasses as a feedstock and is capable of producing 365,000 liters of ethanol per year.
Approximately 82% of the country’s 0.8m population is connected to the grid, with the highest concentration in urban areas. To help increase access to electricity among the rural population, the government launched several initiatives, most of which promote the use of photovoltaic installations supplied by small scale private companies. The Hinterland Electrification Program (HEP) was created in 2005 under the Unserved Areas Electrification Programme (UAEP) and implemented 11,000 65-watt photovoltaic solar home systems from 2011 to 2014. As of January 2015, 200 communities had benefited from the HEP.
Since 2012, the government of Guyana exempts machinery and equipment that generate or utilize power from renewable sources from the value-added tax (VAT) and import duties. This is the only renewable energy incentive currently in force
Score Summary
Guyana’s 0.54 overall score in Climatescope 2015 is a slight decline from its 2014 score of 0.60. The change left Guyana in 51st place overall in 2015, down from 49th place in 2014.
In 2015, Guyana registered improvement on the Growth Rate of Clean Energy Investments Indicator of Clean Energy Investment and Climate Financing Parameter II. However, its progress on that indicator was neutralized by diminished performance on the Loans, Grants and Grant Programs Indicator of Parameter II.
On Enabling Framework Parameter I, Guyana finished 45th in 2015, a five-place improvement from 2014. Its 2015 and 2014 Parameter I scores were 0.78 and 0.60, respectively.
On Clean Energy Investment and Climate Financing Parameter II, Guyana’s ranking fell from 16th to 34th place. Its 2015 Parameter II score of 0.37 compares with 0.82 recorded for 2014.
On Low-Carbon Business & Clean Energy Value Chains Parameter III, Guyana in 2015 matched its last-place finish of 2014. In both years, its Parameter III score was 0.07.
On Greenhouse Gas Management Activities Parameter IV, Guyana registered the same score, 0.71, in both 2015 and 2014. It ranked 40th in 2015 versus 41st in 2014.